Mining exports drive surplus

AUSTRALIA’S trade surplus has improved, helped by a lift in mining exports even as imports remain steady.

The value of the nation’s exports outstripped the cost of imports by $989 million in August, seasonally adjusted, according to figures released yesterday by the Australian Bureau of Statistics.

That was up from a revised $808 million surplus in July.

The August surplus was higher than the $850 million economists expected.

It came primarily on the back of higher mineral shipments, which bumped up overall exports by $166 million, or 1 per cent.

The boost was the result of a stronger than expected upturn in nominal iron ore exports, which spiked 10 per cent over the month, JP Morgan economist Tom Kennedy said.

“While still early days in the tracking process, the weakness in export prices suggest most of the uplift in the trade reports so far through the third quarter is being driven by stronger volumes growth,” he said.

The trade balance has been in surplus for much of the year, helped by a rebound in iron ore prices and rising natural gas exports. Economists expect the momentum to continue as production from liquefied natural gas projects ramps up and iron ore prices stay above the $US50 a tonne level.

Imports remained steady in August, down just $15 million for the month, as an increase in services imports offset factors including a decline in consumption goods.

“The weakness in consumption goods imports is consistent with the recent slump in the monthly retail sales reports,” Mr Kennedy said.

Still, the trade performance had been underwhelming this quarter, belying expectations that higher average commodity prices would boost exports, Westpac economist Andrew Hanlan said. AAP